Oops! Home Prices Didn’t Crash After All In Thousand Oaks, CA

Oops! Home Prices Didn’t Crash After All In Thousand Oaks, CA

 

During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts:

Jeremy Siegel, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business:

“I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.”

Mark Zandi, Chief Economist at Moody’s Analytics:

“Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.”

Goldman Sachs:

“Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.”

The Bad News: It Rattled Consumer Confidence

These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the December Consumer Confidence Survey from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year.

The Good News: Home Prices Never Crashed

However, home prices didn’t come crashing down and seem to be already rebounding from the minimal depreciation experienced over the last several months.

In a report just released, Goldman Sachs explained:

“The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ”

Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: Case-Shiller and the FHFA. Here are the numbers each reported:

Home values seem to have turned the corner and are headed back up.

Bottom Line

When the forecasts of significant home price depreciation were made last fall, they were made with megaphones. Mass media outlets, industry newspapers, and podcasts all broadcasted the news of an eminent crash in prices.

Now, forecasters are saying the worst is over and it wasn’t anywhere near as bad as they originally projected. However, they are whispering the news instead of using megaphones. As real estate professionals, it is our responsibility – some may say duty – to correct this narrative in the minds of the American consumer.

Today’s Real Estate Market: The ‘Unicorns’ Have Galloped Off In Simi Valley, CA

Today’s Real Estate Market: The ‘Unicorns’ Have Galloped Off In Simi Valley, CA

Comparing real estate metrics from one year to another can be challenging in a normal housing market. That’s due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared.

Comparing this year’s numbers to the two ‘unicorn’ years we just experienced is almost worthless. By ‘unicorn,’ this is the less common definition of the word:

“Something that is greatly desired but difficult or impossible to find.”

The pandemic profoundly changed real estate over the last few years. The demand for a home of our own skyrocketed, and people needed a home office and big backyard.

  • Waves of first-time and second-home buyers entered the market.
  • Already low mortgage rates were driven to historic lows.
  • The forbearance plan all but eliminated foreclosures.
  • Home values reached appreciation levels never seen before.

It was a market that forever had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ year.

Now, things are getting back to normal. The ‘unicorns’ have galloped off.

Comparing today’s market to those years makes no sense. Here are three examples:

Buyer Demand 

If you look at the headlines, you’d think there aren’t any buyers out there. We still sell over 10,000 houses a day in the United States. Of course, buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below):

Home Prices

We can’t compare today’s home price increases to the last couple of years. According to Freddie Mac, 2020 and 2021 each had historic appreciation numbers. Here’s a graph also showing the more normal years (2017-2019):

We can see that we’re returning to more normal home value increases. There were several months of minimal depreciation in the second half of 2022. However, according to Fannie Mae, the market has returned to more normal appreciation in the first quarter of this year.

Foreclosures 

There have already been some startling headlines about the percentage increases in foreclosure filings. Of course, the percentages will be up. They are increases over historically low foreclosure rates. Here’s a graph with information from ATTOM, a property data provider:

There will be an increase over the numbers of the last three years now that the moratorium on foreclosures has ended. There are homeowners who lose their home to foreclosure every year, and it’s heartbreaking for those families. But, if we put the current numbers into perspective, we’ll realize that we’re actually going back to the normal filings from 2017-2019.

Bottom Line

There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.

Why Buying a Vacation Home Beats Renting One This Summer In Oxnard, CA

Why Buying a Vacation Home Beats Renting One This Summer In Oxnard, CA

For many of us, visiting the same vacation spot every year is a summer tradition that’s fun, relaxing, and restful. If that sounds like you, now’s the time to think about your plans and determine if buying a vacation home this year makes more sense than renting one again. According to Forbes:

“. . . if the idea of vacationing at the same place every year makes you feel instantaneously relaxed, buying a vacation home might be a wise move.”

To help you decide if making a move like this is right for you, let’s explore why you may want to consider purchasing a vacation home today.

Benefits of Owning Your Vacation Home

You don’t have to worry about finding a place to stay. It can be a challenge to find a rental where you want, when you want. Some summer vacation destinations are more popular than others, meaning your favorite place may be booked up in advance. Bankrate explains why owning your vacation home means you don’t have to worry about that sort of inconvenience:

“. . . a second home can offer a place to have quality time with your family and ensures that you always have a vacation destination.”

It’s an investment. Home values typically appreciate over the long haul. That holds true for your vacation home as well, especially if it’s in an area with growing market demand. This can help grow your net worth with time.

Vacation homes may provide tax benefits. If you own a vacation home, you may be eligible for tax deductions based on where it is. However, before buying, you’ll want to consult with a tax professional to discuss first as taxes can vary by location.

It could potentially turn into a retirement location. If you love the location of your vacation home, you could potentially sell your primary residence and retire there in the future.

How a Pro Can Help You Find Your Perfect Match

As you’re preparing for summer vacation, remember, you could potentially visit your second home instead of another rental unit or hotel. If that sounds appealing to you, a

local real estate agent is your best resource. They have the knowledge and resources to help you understand the area and what vacation homes are available in your budget. Plus, these agents can explain the perks of how owning a second home can benefit you.

Bottom Line

If any of these reasons for owning a vacation home resonate with you, let’s connect. You still have time to enjoy spending the summer in your vacation home.

Why Buyers Need an Expert Agent by Their Side In Simi Valley, CA

Why Buyers Need an Expert Agent by Their Side In Simi Valley, CA

The process of buying a home can feel a bit intimidating, even under normal circumstances. But today’s market is still anything but normal. There continues to be a very limited number of homes for sale, and that’s creating bidding wars and driving home prices back up as buyers compete over the available homes.

Navigating all of this can be daunting if you’re trying to do it alone. That’s why having a skilled expert to guide you through the homebuying process is essential, especially today. Bankrate shares this perspective:

“Advice and guidance from a professional real estate agent can be invaluable, particularly amid a hot or unpredictable housing market.”

Here are just a few of the ways a real estate expert makes a big difference:

  • Experience – Real estate professionals know the ins and outs of what’s happening today, how it impacts buyers, and how to navigate any hurdles that may pop up.
  • Education – Knowledge is power when it comes to buying a home. Your advisor will simply and effectively explain market conditions and translate what they mean for you so you can feel confident in your decision.
  • Negotiations – Your real estate advisor advocates for your best interests. Having an expert on your side provides assistance with the purchase agreement. An agent can also help you negotiate potential seller concessions if the inspection reveals issues with the home.
  • Contracts – Real estate advisors guide you through the disclosures and contracts necessary in today’s heavily regulated environment.
  • Pricing – Making an offer and negotiating with a seller can be one of the most difficult and stressful parts of the homebuying process. A skilled agent will help you understand what similar homes are selling for so you have the full picture of what you may want to offer.

All of these reasons combined may be why 86% of recent buyers used an agent according to the latest Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR). NAR also has this to say about why an agent is so essential today:

“A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget. Agents are also a great source when you have questions about local amenities, utilities, zoning rules, contractors, and more.” 

What’s the Key To Choosing the Right Expert?

It starts with trust. You’ll want to know you can trust the advice they’re giving you, so you need to make sure you’re connected with a true professional. No one can provide perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in today’s market. But a true professional can give you the best possible advice based on the information and situation at hand.

They’ll help advocate for you throughout the process and coach you on the essential knowledge you need to make confident decisions. That’s exactly what you want and deserve.

Bottom Line

It’s critical to have an expert on your side who is skilled in navigating today’s housing market. If you’re planning to buy a home this year, let’s connect so you have a real estate advisor on your side to give you the best advice and guide you along the way.

The Best Time To Sell Your House Is When Others Aren’t Selling In Thousand Oaks, CA

The Best Time To Sell Your House Is When Others Aren’t Selling In Thousand Oaks, CA

 

If you’re thinking about selling your house, you should know the number of homes for sale right now is low. That’s because, this season, there are fewer sellers listing their houses for sale than the norm.

Looking back at every April since 2017, the only year when fewer sellers listed their homes was in April 2020, when the pandemic hit and stalled the housing market (shown in red in the graph below). In more typical years, roughly 500,000 sellers add their homes to the market in April. This year, we saw fewer than 400,000 sellers entering the market in April (see graph below):

While there are a number of factors contributing to this trend, one thing keeping inventory low right now is that some homeowners are reluctant to move when the mortgage rate they have on their current house is lower than the one they could get today on their next house. It’s called rate lock.

As a recent survey from Realtor.com explains, 56% of people who are planning to sell in the next 12 months say they’re waiting for rates to come down.

While this wait-and-see approach is right for some sellers, it also creates an opening for more eager sellers to jump in now.

If your current house truly doesn’t fit your needs anymore and you’re ready to move, don’t miss this chance to stand out. When fewer sellers are putting their homes up for sale, buyers will have fewer options, so you set yourself up to get the most eyes possible on your house. That’s why your house could see multiple offers as buyers compete over the limited supply of homes for sale – especially if you price it right.

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“Inventory levels are still at historic lows . . . Consequently, multiple offers are returning on a good number of properties.”

Bottom Line

If you’re ready to sell now, beat the competition before it comes onto the market. If you do, your house should stand out and could get multiple offers. Let’s connect to get you market ready.

Homeowners Have Incredible Equity To Leverage Right Now In Phoenix, AZ

Homeowners Have Incredible Equity To Leverage Right Now In Phoenix, Az

Even though home prices have moderated over the last year, many homeowners still have an incredible amount of equity. But what is equity? In the simplest terms, equity is the difference between the market value of your home and the amount you owe on your mortgage. The National Association of Realtors (NAR) explains how your equity grows over time:

“Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”

How Your Equity Can Help You Achieve Your Goals

The equity you build up over the years can be used to your advantage when you sell your current house and buy your next home. If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, your equity can be a powerful tool you can use to help you make a move in today’s market. That’s because it may be some (if not all) of what you need for your down payment on your next home.

And how much equity you have may surprise you. A recent survey from Realtor.com finds many homeowners today estimate they’ve built up a significant amount of equity:

The latest data from CoreLogic helps solidify why homeowners are feeling so good about the equity they’ve likely gained over time. As Selma Hepp, Chief Economist for CoreLogic, says:

“While equity gains contracted in late 2022 due to home price declines in some regions, U.S. homeowners on average still have about $270,000 in equity, nearly $90,000 more than they had at the onset of the pandemic.”

How a Skilled Real Estate Agent Can Help

If you’re looking to leverage your equity to boost your buying power in today’s market, having a trusted agent by your side makes a difference.

A real estate professional can help you better understand the value of your home, so you’ll get a clearer picture of how much equity you likely have. As a recent article from Bankrate says:

“Hiring a skilled real estate agent can give you a realistic estimate of home prices in your area and how to price your current home. Using that figure, you can calculate how much equity you have and what your net proceeds will look like, so you can apply that money toward the down payment and closing costs of your new home.”

Having a solid understanding of your equity is key when it comes to making decisions about buying or selling your home. A skilled agent can help you navigate the often-complicated process of selling your house and ensure the transaction goes smoothly.

Bottom Line

Today, many homeowners are sitting on a substantial amount of equity, and you may be one of them. Let’s connect so we can estimate how much equity you have and plan how you can use it toward the purchase of your next home.

The Impact of Inflation on Mortgage Rates In Oxnard, CA

The Impact of Inflation on Mortgage Rates In Oxnard, CA

If you’re reading headlines about inflation or mortgage rates, you may see something about the recent decision from the Federal Reserve (the Fed). But what does it mean for you, the housing market, and your plans to buy a home? Here’s what you need to know.

Inflation and the Housing Market

While the Fed’s working hard to lower inflation, the latest data shows that, while the number has improved some, the inflation rate is still higher than the target (2%). That played a role in the Fed’s decision to raise the Federal Funds Rate last week. As Bankrate explains:

“Keeping its inflation-fighting streak alive, the Federal Reserve has raised interest rates for the 10th time in 10 meetings . . . The hikes aimed to cool an economy that was on fire after rebounding from the coronavirus recession of 2020.”

While the Fed’s actions don’t directly dictate what happens with mortgage rates, their decisions do have an impact and contributed to the intentional cooldown in the housing market last year.

How This Impacts You

During times of high inflation, your everyday expenses go up. That means you’ve likely felt the pinch at the gas pump and in the grocery store. By raising the Federal Funds Rate, the Fed is actively trying to lower inflation. If the Fed is successful, it could also ultimately lead to lower mortgage rates and better homebuying affordability for you. That’s because when inflation is high, mortgage rates tend to be high. But, as inflation cools, experts say mortgage rates will likely fall.

Where Experts Think Mortgage Rates and Inflation Will Go from Here

Moving forward, both inflation and mortgage rates will continue to impact the housing market. And as Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“Mortgage rates are likely to descend lower later in the year as the consumer price inflation calms down . . .” 

Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), explains:

“We continue to expect that mortgage rates will drift down over the course of the year as the economy slows . . .”

While there’s no way to say with certainty where mortgage rates will go from here, the experts think mortgage rates will trend down this year if inflation comes down too. To stay informed on the latest insights, connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting and how it could impact your homeownership plans.

Bottom Line

Don’t let headlines about the latest decision from the Fed confuse you. Where mortgage rates go from here depends on what happens with inflation. If inflation cools, mortgage rates should tick down as a result. Let’s connect so you have expert insights on housing market changes and what they mean for you.

Reasons To Sell Your House Today Simi Valley, CA

Reasons To Sell Your House Today SIMI VALLEY, CA

Some Highlights

  • Not sure if selling your house is the right move today? You should know there are a number of reasons it still makes sense to sell now.
  • Your house will stand out because inventory is low. That’s why the number of offers on recently sold homes is on the rise. And most homeowners have a lot of equity that can fuel a move.
  • If you’re thinking about selling your house, let’s connect to discuss if now may be the time to move.